Consultant

Dubai Metro will earn city $63bn by 2030; over four times its cost

For every dirham spent, 4.3 dirhams will be returned by 2030

The Dubai Metro will generate $63 billion for the cities economy by 2030 according to a joint study by Dubai Roads and Transport Authority (RTA) and the UK’s Henley Business School.

The Economic Impact of the Dubai Metro Project study uses data from the Dubai Land Department, Dubai Municipality, Dubai Statistics Center, Department of Economic Development, Department of Tourism & Commerce Marketing, and the main shopping centres to examine how the Dubai Metro has affected the economy since it first opened in 2009 up to 2016.

Included among the data are 50,000 sales transactions and 150,000 lease transactions within a 500m radius of the Metro Stations.

The study also looks at the capital and operational costs of the Metro and matches them to the financial benefits of the project in the form of tariff revenues, increases in operational jobs, and appreciation in the value of properties in the surroundings of the Metro stations.

Material benefits also include increasing consumer surplus of metro users (residents, citizens, tourists), raising foreign investment, reducing mobility and vehicle operation costs, curbing carbon emissions, decreasing traffic accidents, cutting road maintenance costs, and boosting employment prospects, said the RTA.

The study estimates the accumulated benefits of the Metro between 2009 and end of 2016 at $18 billion compared to accumulate capital and operational costs of about $11 billion, “i.e. the cost-benefit ratio reached 1.6 by the end of 2016. It is estimated that the accumulated benefits in 2020 and 2030 would be $31 billion and $63 billion respectively, whereas the capital and operational costs for the same years were estimated at $12 billion and $15 billion respectively. It follows that the cost-benefit ratio for the said years will be 2.5 and 4.3 respectively, ” the RTA said in a statement.

“This means that every dirham spent on the Dubai Metro has yielded a return of 1.6 dirhams to the economy of the Emirate in 2016, and this return will shoot to 2.5 dirhams and 4.3 dirhams in 2020 and 2030 respectively.”

Mattar Al Tayer, Director General and Chairman of the Board of Executive Directors of RTA, commented: “At a time when RTA celebrates the ninth anniversary of Dubai Metro, this study underlines Dubai’s keenness to invest in improving and widening its infrastructure, since it is the backbone of driving the competitiveness of cities and countries. The infrastructure in general and roads in particular play a massive role in supporting economic, social and tourist activities, boosting the integration of the local economy, and enhancing GDP. The Dubai Government is aware of the paramount importance of investment in infrastructure, and the Government has therefore consistently maintained this policy. As a result, the emirate’s investments in roads and transport infrastructure have touched AED 100 billion ($27 billion).

“Such a trend has been rewarded with clear dividends that have propelled the competitiveness of the Emirate and the UAE in general, making Dubai a global benchmark for the quality of infrastructure. The remarkable roads network of the emirate was instrumental in the UAE achieving Number One ranking in the quality of roads worldwide for four years in a row (2014-2017), according to the Global Competitiveness Reports of the World Economic Forum.

“The sustained improvement of roads, as well as transit systems and services witnessed by Dubai since the establishment of the RTA in 2005 have generated savings of as much as AED125 billion in the cost of fuel and time,” added Al Tayer.

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